President Donald Trump has repeatedly denied that Americans are suffering from higher prices — at least, when he isn’t tacitly admitting that his Iran War has caused those prices to skyrocket. On Thursday, however, an Ivy League economist broke down exactly why the president’s gaslighting about the state of the economy is a doomed strategy.
“What's interesting is my colleagues at the Budget Lab at Yale — we actually calculated the impact of the combination of the president's tax cut, which did result in greater refunds of around $350 for the average family,” Natasha Sarin, President of the Budget Lab at Yale, told MS NOW anchor Erielle Reshef. “And so in aggregate, what the reality is, is what you're hearing from those competitors, which is that things are getting more expensive for them, and we're actually in a situation in this economy called negative wage growth.”
She added, “The reality is that inflation is outpacing the wage gains that are happening for the average worker.”
Reshef then turned to The Daily Beast's editor-at-large Molly Jong-Fast, asking whether Trump can politically succeed in dismissing Americans’ economic concerns as a non-issue.
“Look, the president has already explained the economy,” Jong-Fast told Reshef. “That is a totally non-partisan fact — left, right, doesn't matter. But it happens to be, in this case, that under Donald Trump things got more expensive. So you actually have a direct line — and I think for him, the most problematic thing might be the war in Iran, because you can draw a direct line between the moment Donald Trump went into Iran and gas prices going up.”
She added, “Then gas prices come down a little bit, and then there's more firing in the strait, and gas prices go up again. So you can really see how much his military action has affected prices.”
Reshef then turned to a former Republican lawmaker to ask whether Trump’s economic denial is a liability for the party in the upcoming midterm elections.
“Yeah — but they have to go down with him,” former Rep. Joe Walsh (R-IL) told Reshef. “He's the Titanic, and every single one of them has to go down with him.”
He added, “But can we just lay out the broad context here? Donald Trump lies as he breathes. I mean, every president spins the economy — Trump outright lies. He lies about everything. When he lies and says the 2020 election was stolen, a lot of people believe that lie, and it works. When he lies and says Haitian migrants were eating cats and dogs, that lie doesn't work because a lot of people can see it's false.”
Walsh concluded, “But when Donald Trump lies about the economy, those lies really don't work, because — as was just said — we all live the economy. We all know how much we're paying at the pump. We all know how much groceries cost. So Trump's lies about the economy simply do not work with most voters. And I have to be honest — I talk to a lot of voters MAGA every day, and his lies about the economy don't work with them either.”
Economists who have spoken to AlterNet explained that, by invading Iran, Trump has all but guaranteed high gas prices for the immediate future.
“Even if hostilities do not restart, the price of oil will not return to pre-Trump levels because there’s a new risk premium that they could restart at any time, increasing tanker insurance costs for example, and because oil infrastructure has been degraded, reducing supply for some time,” Dr. Robert Shapiro, a top economic adviser to President Bill Clinton, told AlterNet in April. “An Iran-controlled toll to use the Strait will produce big bucks for Iran, but its impact on world prices for oil, natural gas, helium, etc. should be minimal. Another source of economic friction will be the now-intense uncertainty about what the Trump administration will do next—in the Mideast and in scores of policies at home; and uncertainty dampens investment.”
He added, “As it is, the economy was weakening before this crisis began, and these and other factors will exacerbate those downward pressures. A resolution over the next two weeks will not stop the deterioration in economic conditions.”
The Trump administration downplayed these issues to AlterNet.
“The United States’ energy dominance status, as the world’s leading producer and a top exporter of oil and natural gas, has positioned us to not rely on the free flow of oil through the Strait of Hormuz like other countries,” White House spokeswoman Taylor Rogers told AlterNet at the time. “If anything, Operation Epic Fury actually underscored the importance of producing reliable, affordable, and secure energy here at home. Many of our allies that have tried transitioning to intermittent and unreliable renewable energy sources have predictably failed to break their reliance on foreign oil that goes through the Strait."
She concluded, "Several countries from around the world are now looking to emulate the President’s energy dominance agenda and are advancing new partnerships that enhance their energy security with the United States.”
